As use of computer networks becomes more pervasive, there is a growing need to provide for the electronic execution/signature of contracts. Electronic execution of contracts can be both more efficient and cost effective than the traditional paper-based approach. One specific type of contract that is amenable to electronic execution is a service agreement (e.g., ServicePac). For example, in purchasing computer hardware, a purchaser may also desire to purchase an associated service agreement. As is well known, these agreements often range over a period of years and can have various pricing schedules.
Unfortunately, many concerns have been raised over electronic contract execution. One such concern is ensuring that electronically executed contracts are legally binding as intended. This can be difficult unless it can be ensured a third party has not fraudulently executed a contract using another party's identity.
One technology widely implemented today is “click and accept” agreements, whereby a computer user is presented with a license agreement or the like on their local machine, and asked simply to click a button if he/she accepts the terms. Although convenient for software licenses, click and accept agreements are grossly inadequate for many higher stakes contracts where further performance is provided, for a long term relationship spanning many years, or where potential liability for the parties is high. For example, with a click and accept agreement, it is usually not necessary to specifically identify the accepting/receiving party. As such, no formal execution (electronic or otherwise) is performed. To this extent, the acceptance or rejection is performed entirely on the receiving party's computer device without subsequent communication with the originating party. Moreover, since a click and accept agreement must be accepted or rejected “as is,” there is no process for a receiving party to request changes or modifications to the agreement.
Another technology currently being utilized allows small value contracts (e.g., usually under $100.00) to be electronically executed by both parties via a public web site. Unfortunately, with this current technology, many important safeguards are not provided. For example, since the web site is public, not only is security and confidentiality lacking, but there is also no authentication process. Accordingly, there is no way to ensure that someone electronically executing the contract is actually the party named in the agreement. Moreover, the current technology fails to provide separate deliberate actions on the part of the parties to first approve and then to execute the contract. Providing each party with an opportunity to deliberately indicate their approval of the contract before execution would not only help to provide fairness for both parties, but would also make subsequent repudiation of the contract more difficult.
In view of the foregoing, there exists a need for a method, system and program product for electronically executing contracts within a secure computer infrastructure. Specifically a need exists for a more secure system for electronically executing contracts so that certain core principles, such as authentication of the parties, can be provided. A further need exists for approval and execution of a contract to require separate deliberate actions by the parties.